Judging from some of the GAF posters who have made games that have been rejected by Steam (I think Oil Blue and Gunman Clive were two such games), the issue to developers is more the near complete silence from Valve than the rejection itself.The Livejournal remark was a reference to the style in which devs post/blog about their Steam rejection.
Say Valve sent you an email saying "Hey, our person assigned to check your game out thought it was terrible. It was buggy, crashed, and the graphics look like they were created by a child in MS Paint. It doesn't deserve to be on our high-quality store." I think that the developers would be happier to hear that since they at least would know that Valve reviewed it, and have some idea as to why.
Similarly, if users reject games on Greenlight, at least maybe there will be some way for them to post comments as to why. Granted, it's the internet, so presumably 85% of the comments will be ASCII art penises and racial slurs, but at least it's some feedback.